Bus firms may be allowed 3.9pc fare rise

PUBLISHED : Sunday, 17 February, 2008, 12:00am
UPDATED : Sunday, 17 February, 2008, 12:00am

Bus firms which had sought fare increases of up to 9 per cent may have to settle for 3.9 per cent. That's the figure the Transport Department has told them a new fare adjustment formula will likely allow.

Kowloon Motor Bus had sought to raise fares by 9 per cent, Long Win Bus requested fares go up by 5.9 per cent and the New Lantao Bus Company wanted to charge passengers 7.24 per cent more. The companies last put up fares at least nine years ago.

The fare adjustment mechanism takes into account the public's ability to pay more, the bus companies' performance and the need to ensure them a reasonable rate of return. Increases require the Executive Council's approval.

In a paper submitted to the transport panel of the Legislative Council, the department outlined the factors and figures determining fare increases under the mechanism.

It said changes in wages in the transport sector and the consumer price index over the past two years potentially allowed the bus operators to raise fares by 3.9 per cent, after accounting for productivity gains. The figure is much higher than recent pay increases. Median monthly household incomes rose only 2.3 per cent from the first quarter of 2006 to the third quarter of last year.

The paper said the formula served only as a reference in determining whether fare rises were justified.

It said the department had to consult Legco and the Transport Advisory Committee before submitting a final recommendation to the Executive Council.

KMB is the largest bus operator in the city, and mainly serves Kowloon and the New Territories.

Its patronage has declined from a peak of 3.11 million in 2002 to 2.76 million last year.

The last time it raised fares was in December 1997, when they went up 7 per cent.

New Lantao Bus last increased its fares in April 1998, by 9 per cent, and Long Win - which operates airport routes - has not raised fares since it began operating in mid-1997.

Legislator Wong Kwok-hing said a fare rise of 3.9 per cent was too high for the public to bear.

Fares should rise no more than 2.5 per cent, he said.